<p>From today's DP:</p>
<p>Penn</a> may post fewer endowment losses than other Ivies - News</p>
<p>
[quote]
"Though higher education is beginning to feel the weight of the economic crisis - in recent weeks some schools have explored the possibility of selling off private equity or have implemented hiring freezes - Penn is in better shape than many Ivy League schools...</p>
<p>"Penn was not historically invested in alternative asset classes such as private equity and real estate. While this meant that the school's endowment lagged behind peers' earlier in the decade, that former investment strategy formed the foundation for a buffer against the current economic climate....</p>
<p>A recent Barron's article estimated that Harvard, Yale and Princeton's endowments could be down as much as 25 to 30 percent since the June 30 reporting deadline because the values of these asset classes dropped....So far, Penn's endowment is down about 7 percent since June 30...</p>
<p>"Gilbertson wrote that Penn is not currently experiencing any liquidity issues...</p>
<p>"The school has 'adequate liquid assets to meet anticipated capital calls even under the most drastic scenarios involving no distributions over the next 12 to 24 months.... </p>
<p>"Penn's operating budget also only draws about 8 percent of its funds from the endowment, according to Penn President Amy Gutmann, making it less endowment-dependent than the schools that have announced hiring freezes.
[/quote]
</p>
<p>In sum:
Huzzah, we have been saved from financial ruin and a crisis in liquidity by our prior poverty and unimaginative investment strategies! And since we had so little endowment wealth to begin with, we never got used to depending on it for operating income. 8% of our operating income came from endowment, vs. 20-30% for dbag schools like Princeton.</p>
<p>High five!</p>